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Eurocopter Seeks U.S. Partners for Projects

Eurocopter is looking for American partners on a proposed European heavy-lift helicopter and its bid for the U.S. Army’s Armed Reconnaissance Helicopter (ARH), CEO Lutz Bertling said Jan. 20.

The European helicopter maker, an EADS subsidiary, is in early talks with Boeing and Sikorsky as potential partners for a Future Transport Helicopter, he told a New Year’s press conference here.

France and Germany support the large helicopter project, which is one of the top priorities of the European Defence Agency’s head, Alexander Weis, Bertling said.

“There is some trans-Atlantic work to be done,” he said, with the possibility of common standardization between American and European programs. Eurocopter is in contact with American original equipment manufacturers, excluding Bell, to explore the potential for a “joint business opportunity,” he said.

The talks were at a preliminary stage, consisting of design discussions, and were being held with Boeing and Sikorsky, said Philippe Harache, Eurocopter executive vice president for customer relations.

Eurocopter also is looking for an American partner to supply military mission systems for the new tender for the ARH program, Bertling said. Eurocopter would supply the airframe to EADS North America, which would act as the prime contractor.

Eurocopter has responded to the U.S. government’s request for industry views with the single-engine EC145 and a double-engined aircraft for the ARH competition. A twin-engined product better matched the requirement, Bertling said. There were, however, logistical benefits of choosing the EC145,which has been delivered to the U.S. Army under the LUH 72 program and is under evaluation by the U.S. Navy, he said.

In India, Eurocopter is bidding for a requirement for 197 Army attack helicopters and a reconnaissance and surveillance aircraft. Eurocopter won the tender for 197 units in 2007, but the government reset the competition after an appeal from Bell. The European company also hopes to sell its NH90 to meet the Indian Navy’s need for shipborne helicopters.

In Japan, Eurocopter is campaigning to sell about 100 NH90s to the Army, Navy and Air Force, Harache said. A recent order of EC135s by the Navy marked the first buy of non-American helicopters by the Japanese armed forces, he said.

The NH90 program is “margin- and cash-positive,” Bertling said. The program is on a fixed and firm contract, and the first deliveries must absorb cost overruns incurred by the lateness of the aircraft, he said. That meant profitability on the NH90 was lower than predicted, he said. No extra provisions were taken on the NH90 in 2008.

Eurocopter flew an unpiloted, fully autonomous EC155 last year as part of a classified UAV project for the French Ministry of Defense, Bertling said.

The company is preparing to support the French Army’s deployment of the Tiger combat helicopter in Afghanistan in the second quarter of the year, Bertling said.

Eurocopter increased its 2008 operating profit over the previous year’s 211 million euros ($279.8 million). Bertling declined to give the amount but said he was “satisfied” by the increase.

Annual sales rose 7.5 percent to 4.5 billion euros from 4.17 billion in 2007, and deliveries rose 20 percent to 588 units from 488. New orders fell to 4.9 billion euros after the record 6.6 billion booked in the previous year. The order backlog was worth 14 billion euros, or 1,550 units, with 71 percent signed with military or government clients, reducing the risk of cancellations, he said.

Some 18 percent of the backlog, however, faces cancellations in view of the economic crisis. Among the leading indicators the company tracks is the second-hand luxury yacht market for market intelligence on sales of VIP helicopters. Sales of VIP aircraft make up about 20 percent to 25 percent of orders, Harache said.

Eurocopter expects to sell about 450 helicopters this year. That figure includes the 22 and 50 NH90s ordered in December, respectively, by France and Brazil, worth 380 million and 1.8 billion euros, Bertling said. (**)

The company will manage cash carefully, with a view to selectively helping customers finance their purchases. Eurocopter will boost research and development spending by 20 percent this year, despite the economic climate, Bertling said.

(**) Note from Panamerican Defense online: The Brazilian order is for 50 EC-725, not NH-90 helicopters. (See post here)